Four separate cyber attacks on wealth management firms were reported to the Financial Conduct Authority (FCA) in 2016.
In response to a request under the Freedom of Information Act, the regulator told Wealth Manager that two of the four assaults were ransomware attacks. Ransomware attacks are a type of ‘cyber blackmail’ that restricts a computer’s access to data in order to force the victim to pay a ransom to decrypt their data and regain access to their systems.
In December, Wealth Manager’s sister title New Model Adviser‰ revealed such an attack was carried out on independent financial adviser (IFA) firm, Argyle Financial Group.
The FCA stated that one of the two other attacks was ‘in relation to hacking’, while another company was the victim of a distributed denial-of-service (DDoS) attack. DDoS attacks are an effort to immobilise an online service by overwhelming it with traffic from multiple sources.
The request asked the FCA about reports of cyber attacks on both wealth and asset management firms in 2015 and 2016.
The watchdog stated that it had not received any reports of cyber-attacks in 2015 from either asset or wealth managers. It also noted that asset managers did not report any attacks in 2016 either.
The FCA added that it ‘has no direct involvement in the network defence activities undertaken within these firms, but provided oversight to the appropriateness of the firm’s responses.’